Italy’s base oils output held in a narrow range in June for a seventh month even after the shutdown of one of the country’s base oils plants earlier this year.Base oils output of 60,300 tonnes in June rose from 57,500 tonnes the previous month, government data showed.The volume remained within a 57,000-66,400 tonnes/month range since the end of last year.The volume was similar to average output levels of 60,600 tonnes/month in 2023 and exceeded average levels of 56,000 tonnes/month in 2022.Output held steady even after the closure of one of Italy’s two virgin Group I base oils units earlier this year.The steady output reflected the frequent shutdown of that base oils unit in recent years even before its closure.The dynamic suggested that the impact of the plant closure could be relatively muted.The rise in Europe’s Group I base oils prices from the start of the second quarter of the year instead pointed to increasingly firm supply-demand fundamentals in the region.A seasonal pick-up in demand and some planned and unexpected plant maintenance work during the second quarter added to those firmer fundamentals.An even sharper rise in Europe’s Group I export prices suggested that Italy’s rangebound production levels had a stronger impact on supplies for overseas markets.Italy’s domestic base oils consumption fell in June for a fifth month from year-earlier levels and at a much steeper pace than the slowdown in the country’s lube demand.The fall in base oils consumption freed up more supplies for export, cushioning the drop in the country’s output.Italy’s total base oils exports in the first four months of the year were similar to year-earlier levels, reflecting that dynamic.But shipments to markets outside Europe fell by more than 25% during that period.Base oils exports to outlets within the region by contrast surged, even with the plant closure.The trade flows and firm regional prices pointed to still-strong demand in Europe for Group I base oils.That firm demand increased the importance of supply holding steady from Italy’s remaining Group I base oils unit..Turkey’s May base oils imports from Russia rise.Italy’s May base oils output falls.Base Oil News stories and analysis also available on ICIS platform
